Q&A/James J. Dalton; Reflections on 48 Years in the Toy Trade

IT is not what you would expect to hear the owner of a toy store saying -- that he is shocked by how much parents spend on toys. Yet James J. Dalton, owner of the Toy House in Hartsdale, said that as someone who grew up in the Depression, he just does not understand the excess.

Mr. Dalton of Hastings-on-Hudson has been in the toy business for 48 years, including 15 at his present location, where he works with his wife, Eleanor, and their son, Thomas. A few years ago, it was one of the stores where one could find Power Rangers. Today it is a place where Beanie Babies are sold for $4.97 and recently retired Beanie Babies were also sold for $4.97.

Here are excerpts from a recent conversation with Mr. Dalton:

Q. What is your pricing philosophy on Beanie Babies?

A. The philosophy is plain and simple. If I buy it from the company, my customers can buy it from me for $4.97, even though I know half of my customers are making more on the Beanie Babies than I am, selling them out of their cars, at school, at flea markets or over the Internet for $20. When I started out in the toy business, the fellow I worked for had a big sign in our back room: ''The customer is not an interruption of your work, it's the cause of your work.''

Q. What do you think of merchants who jack up the price of Beanie Babies?

A. It's the American way. You have bills to pay. When you have a product that everybody wants -- especially today for the smaller guy who has to compete against the giants -- if there is a chance you can make a few extra dollars to pay those bills, I don't blame them. It's up to the consumer to make their choice whether they buy it or don't buy. But I'm hearing prices that are really -- if you can believe half the stories -- that are really out of sight.

A. It's a bad time to ask me that. This has become drudgery to me, where it used to be fun. I live up here, and when I used to have a big store in Staten Island, I had a long commute, and I used to sing all the way. It was a fun business. But now it's more lucrative -- yes -- but the fun in the toy industry is gone. It's strictly business.

Q. Is the fun gone because you're older or because it is a changed industry?

A. Partly because I'm older and partly because I'm a Depression baby. I'm just astounded at the amount of money people spend on toys. We, of course, never had it as children because we were too poor to have it. I don't know that we would have had it anyway. I was in the toy industry when my children were young; I didn't own the businesses then, but I had salesmen who were constantly giving me toys. I'd bring them home and parcel them out. I'd bring home a Barbie for one daughter, Barbie's girlfriend for another and Ken for another. They all didn't have a Barbie or a Ken. So when I see what has evolved in the toy industry now, it is no longer a birthday present, good report card, helping around the house kind of thing. Instead it's on the same plane with food and clothing.

I see people spending as much for toys as they do to feed and clothe their children, and children expect it: that's the problem. I had one lady in the other day and I was discussing this with her and she said: ''You know what it is? We all feel guilty because we're both out working all the time and we're not home with the kids.'' And I looked at her and said: ''You're feeling guilty about being out working to help feed and clothe your children? You feel guilty?'' My mom and dad both worked simply because mom had to work, and it was the Depression. Guilt feelings? Why would you feel guilty?

Q. What about grandparents? Aren't they the indulgent ones?

A. Grandparents do a lot more buying for their grandchildren than they ever did for their own children. It's a totally different emotion. I don't know why it is except that maybe it's your child having a child. I was doing back flips when my children were born. When I had my grandchildren in my arms -- three hours after they were born, which I think is absolutely crazy, I never got my own child in my arms for two weeks -- all I wanted to do was cry. I was so happy to have one of them in my arms. I guess that possibly has something to do with it. Or more important, the grandparents are in a better position to buy toys. I didn't give to my own kids, but every time I go up to see the grandchildren I want to bring something, and I have my son-in-law with the hair on his neck up, so I just hold back.

Q. You have saved your rare Princess Beanie Babies for the grandchildren, I understand.

A. Grandchildren, grandnieces, grandnephews. Now I've started devising another plan. What do you do if in fact you get to a point where you've taken care of all your family? Who do you pick and choose of your customers to sell them to? The idea came to me: I won't sell it to any one of them. Each time they come in and make a purchase I'll put their name down in a little box and at the end of a certain period I'll pick out names. That's how I'll get rid of my extra Princesses and Errins -- if I get them. That way I won't have eight other customers saying, You sold it to so and so and I'm in here all the time, why didn't you hold one for me?

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A. The way it is now will have to abate at some point in time, no two ways about it. The strength of the Beanie Babies is its price. It's not a big deal collecting them when you can get them for $5. During the Power Ranger craze -- which essentially was even stronger than this -- there were people that were doing absolutely crazy things for them. We had 72 items of the Power Ranger category and they ranged in price from $10 to $150, and those things sold almost like Beanie Babies are selling today.

That had to come to a point where it would stop. And those products stayed stagnant. Once everybody bought everything, there was nothing left to buy. This guy with Beanie Babies has been very shrewd, making big announcements on the Internet about all the ones that are being discontinued and then bringing in new ones. If he keeps doing that, he will probably get a few more years out of it, especially when they can keep the price down -- I don't know how he does it. The value of that product is the best I've seen in 48 years in this business. The item is made beautifully. When I look at Gobbles the Turkey, for example, there's enough material in there for two Beanie Babies. He has done a tremendous job with the designing.

Q. What do they charge you at wholesale?

A. They charge us half plus freight, so there isn't a whole lot of profit in it. I think that's why a lot of other stores have upped the price.

Q. In contrast to the fad items, will there always be a market for the Madame Alexander dolls you sell?

A. Madame Alexander has been a phenomenon the whole 48 years I've been in the business. There was a time in Staten Island we couldn't keep enough Madame Alexanders in stock. Cabbage Patch changed that; however, it's still very, very strong. I had a woman once who flew from Massachusetts to my Staten Island store to buy Madame Alexander dolls. I could write a book about the stories that happened with these dolls over the years. They were selling the $29.95 doll back then in those days for $100 and up in her town, and they would only allow her to buy one doll at a time. So they had a weekend special on airline fares, $99 round trip. She took a plane to Newark and a cab to my store, and I let her buy eight dolls. So she figured she saved $400 or $500.

Q. So you don't think Beanie Babies will have the same lasting power?

A. No, but I was totally wrong about Beanie Babies to begin with. I thought they would be a good seller, but remember that first handbook that came out about Beanie Babies, which was written by private people -- like an unauthorized book? When the book was first shown to me, I saw it said such and such Beanie will be worth $2,500. I said: ''What, are these people insane? That's a $5 toy.'' I decided I wouldn't sell this book to my customers because I thought it was a lot of baloney, outright lies.

But my customers would all come in with this book, which they bought somewhere else. So I decided I was in business to sell merchandise, not to lecture. I carry the book now, and it's a tremendous seller. And some of the stuff it predicted has happened.